Chapter 5. Profits from the Prophets?

Should investors follow the smart money?

The two biggest limitations for the vast majority of individual investors are that they do not have the time or the investment training to conduct the kind of analysis they want. Professional investors overcome these two limitations. They have the time and resources to conduct rigorous and relatively complete research on firms and their prospects. In fact, that is their job! Many investors turn to these professionals, or prophets, to get good investment recommendations. Yes, investors should follow the smart money. But who represents the smart money?